The Home Equity Theft Reporter

Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.

Saturday, December 24, 2016

City To Drop 184 Counts Of Building Code Violations By Boulder Landlord In Exchange For $410K Settlement Payment For Alleged Illegal Subdividing Of 92 Bedrooms

In Boulder, Colorado, the Daily Camera reports:

The owners of Boulder's Sterling University Peaks apartments, who this summer were cited for illegally subdividing 92 bedrooms in the complex, have reached an agreement to settle the case for $410,000, the city announced [].

Under the terms of the deal, the owners of the complex, located at 2985 E. Aurora Ave., will pay a $150,000 administrative penalty and $260,000 in restitution to current and former tenants.

The owners will get credit for the $168,000 they've already paid to some tenants in the form of refunds, expense reimbursement and rent waivers.

The penalty and restitution amounts are the highest ever paid to resolve a Boulder Municipal Court case, according to the city.

"This settlement underscores both the city's commitment to upholding safety standards in rental housing in Boulder and the importance of providing compensation to individuals who were directly impacted by the owners' actions," said Tom Carr, the city attorney, in a statement.

In return, Boulder is dismissing the 184 counts it filed against each of the building's owners in September for violating the city's building code. Each count carried with it the potential for a $1,000 fine, which meant that the five owners together could have faced $920,000 in total penalties — $184,000 for each owner.

Nashville-Area HUD Administrator Says More Local Landlords Are Bailing Out Of Section 8 Program, Refusing Lease Renewals To Those Receiving Federal Rent Subsidies; Says City Could Use Another 200-300 Units In Program

In Antioch, Tennessee, WZTV-TV Channel 17 reports:

An Antioch family says it’s about to be forced out of a Section 8 home for the second time.

Courtney Norman's story begins several years ago when the owners of her home off Treuland and Meridan stopped renting to Section 8. That forced her to Antioch, and she says the same thing is happening again.

As a disabled mother of four, money is tight for Norman. “I've always provided a roof for my kids,” Norman said. But she's made it work. "I've never been in fear of losing my housing," Norman said,

But, that's not the case right now.

Earlier this month, Pebble Creek Apartments served a 30-day eviction notice saying the complex is no longer renewing Section 8 leases. Norman says it's the second time this has happened to her, but finding a new place she can afford is much harder now.

"I've been here all my life, don't have a desire to leave the state, but unfortunately, that's where it's pushing out us tenants," Norman said,

Renters facing a second Section 8 displacement may soon become more common in Nashville.

Berry says Nashville currently has about 200 fewer landlords offering Section 8 housing than six years ago, and the city could really use another 200 to 300 units. "There is an issue in Nashville with housing, our Section 8 department has felt that, honestly they're working overtime," Berry said.

Fewer landlords mean fewer options for this mother who dreads what's going to happen next year.

"When I'm going to get that knock from the sheriff's office, telling me I have to leave and my kids are going to be on the street," Norman said.

Fox 17 was not able to reach the owners of Pebble Creek Apartments for comment at the time this story was written. But, Norman says there are 18 other families there who are also being forced out.

MDHA does say owners have the legal right to evict those tenants whose leases are up.

A class action lawsuit by Harlem tenants accuses their landlord of illegally jacking up rents and abusing city tax breaks in more than 20 apartment buildings.

The Manhattan Supreme Court filing charges Big City Properties LLC and Big City Realty Management with “a scheme designed to inflate rents over and above the amounts which they are legally permitted to charge.”

The lawsuit, with 28 named plaintiffs, charges the companies abuse the city’s J-51 program by taking the offered tax breaks without providing tenants with rent-stabilized leases.

Rent hikes based on a system known as individual apartment improvement — installation of new doors, counters, cabinets, for example — were levied despite a lack of actual work in the apartments, charged the lawsuit brought by the law firm of Newman Ferrara.

“J-51 offenders are not only cheating on their taxes, but also robbing our city of affordable housing,” said Aaron Carr, founder of the nonprofit Housing Rights Initiative.(1)

Two Toddlers Suffer Fatal Burns From Shooting Steam From Radiator In South Bronx Apartment Rented By City From Private Landlord To Temporarily House Homeless; Weakened Valve That Uncoupled From Aging Heating Unit Under Normal Pressure May Be To Blame

In the Hunts Point section of the Bronx, DNAinfo (New York) reports:

Two young girls were killed [] after the radiator in their city-funded shelter apartment — owned by a notorious slumlord — suddenly filled their room with steam as they napped, officials said.

The two girls — 1-year-old Scylee Vayoh Ambrose and 2-year-old Ibanez Ambrose — suffered first-, second- and third-degree burns over 70 percent of their bodies inside 720 Hunts Point Ave. at about 12:05 p.m., according to the FDNY and NYPD. They were both rushed to Lincoln Hospital where they were pronounced dead.

Building resident Anne Martinez, 47, said she saw the girls' mother screaming outside their apartment after they were burned.

The girls' parents had just put them down for a nap in their crib when a valve on a radiator came off, sending steam shooting into their room, police sources said.

The girls were scalded and their father, Peter Ambrose, suffered a burned hand, police at the scene said.

Both parents were being questioned at a local precinct stationhouse, but it did not appear they would be charged, sources added.

A weakened valve on an aging radiator caused the “freak accident” that tragically killed two infant sisters in a city-funded apartment for homeless families, DNAinfo New York has learned. [...] Sources said the valve was weakened under normal wear and tear and that it suddenly uncoupled under normal pressure when the heat was turned on, pumping scalding steam into the room.

“There was no explosion and there was no extraordinary pressure put on the radiator than was done every day when the heat came on,” one well-placed source familiar with the investigation said. “It basically could have happened anywhere at any time.”

When we visited the complex came to talk to renters, the management company told us to leave and referred us to their law firm. We reached out to their attorney multiple times, but he didn't call us back.

The homeowner's association learned about the sinkholes more than five years ago. The HOA even filed a multimillion dollar lawsuit against its insurance company, which refused to pay all the estimated repair costs.

The renters we spoke to moved in after the lawsuit was filed. “That's something they should have told us before we moved in. I would have never signed the lease,” said Sanders. “I think they should put notices out,” said Rosario.

“Someone could get hurt. Someone could get killed if the sinkhole opened up,” said attorney Kirk Eason.

***

“I had to come up with money I didn't have, but I feel safer at night sleeping knowing that I’m not going to wake up and my front door's six feet above me,” said [the now ex-tenant] Rosario.

Friday, December 23, 2016

Lawyer Dodges Serious Consequences, Gets Off w/ Public Reprimand For Failure To Exercise Oversight Over Sticky-Fingered Employee Who Looted Firm's Trust Account For Over $500K; Judges Critical Of Attorney's Foot-Dragging Before Over 50 Affected Clients Finally Recovered Their Pilfered Cash

In Augusta, Georgia, The Augusta Chronicle reports:

Local attorney Victor Hawk has been publicly reprimanded by the federal court judges in Augusta in connection with a former employee’s embezzlement of more than half a million dollars from the firm’s clients.

In an order signed Tuesday, U.S. District Court Judges J. Randal Hall and Dudley H. Bowen Jr. found Hawk failed to take appropriate steps to safeguard clients’ money from Richard Lee Owen and that he was negligent in his supervision of Owen.

Between January 2009 and July 2012, Owen employed a number of schemes to steal $594,731 from the Hawk firm’s trust account. More than 50 clients were cheated. Owen was fired in July 2012 when Hawk learned Owen had charged a client $18,000 for services that should have been done at no cost. Within six weeks, Hawk started getting calls about bills not being paid to clients or on their behalf although his firm’s records that Owen created indicated the payments were made.

In November 2012, Hawk got a complete set of the firm’s bank records and saw for the first time the endorsements on the back of checks. He called the FBI.

Owen’s trial began in March 2015 but he opted to plead guilty during it. Bowen sentenced Owen to 236 months in prison on June 12, 2015. The judge also appointed a trustee to review the Hawk firm’s accounts to determine how much money was owed to clients who were cheated. He determined the amount was $192,900.

Hawk, according to the judges’ order unsealed Tuesday, delegated many of his responsibilities to Owen and provided little oversight.

At Owen’s sentencing, Hawk testified he considered Owen not only a trusted employee but a family friend. The judge questioned Hawk about his clients’ financial losses and what he was doing to ensure they were repaid.

In Tuesday’s order, the judges criticized Hawk for not fully paying off his clients until the fall of 2015. Some clients had had to wait for the money they were owed for five years. Hawk, the judges’ wrote, “failed to treat the situation with an appropriate sense of urgency.”

While Hawk could have been suspended from practicing law in U.S. District Court in the Southern District of Georgia, the judges found mitigation to believe only the public reprimand was appropriate.

“Mr. Victor Hawk violated the rules of professional conduct in failing to effect measures giving reasonable assurances that the conduct of his employee, Richard Lee Owen, was compatible with his professional obligations and in his grossly negligent failure to supervise Mr. Owen,” the order reads.

Lawyer Held On $1 Million Bail Facing 26-Count Indictment For Various Ripoffs Of Clients, Others Totaling Nearly $250K

In Boston, Massachusetts, the Boston Herald reports:

A suspended attorney living in the U.S. illegally is held on $1 million cash bail after prosecutors say he stole nearly a quarter-million dollars from clients, friends, and other business partners to finance a lavish lifestyle that included drugs, gambling, luxury cars, and a penthouse apartment.

Wassem Amin, 31 replied “not guilty” repeatedly as a court clerk rattled off a recently returned 26-count grand jury indictment during a magistrate session this morning in Suffolk Superior Court.

Fueled by “drugs, gambling, and a desire for luxury living,” Assistant District Attorney Michele Granda said Amin orchestrated numerous schemes including duping a client to wire nearly $50,000 into a corporate account. Amin claimed it was for legal service, but Granda said the cash was used to prepay a two-year lease on a Mercedes S-Class sedan.

Amin also racked up $35,000 in charges on six credit cards opened up on the names of a law school friend and a legal intern, who became Amin’s girlfriend, without their authorization, Granda said. The ADA said Amin used the money for cash withdrawals at Foxwoods and luxury vehicle rentals and threatened one of the victims when he learned a complaint had been filed.

In 2011, Amin forged a letter to induce a friend to co-sign for a student loan with the promise of a high-paying job, Granda said. Amin, who graduated from the New England School of Law in 2012, did not make payments on the loan, leaving his friend on the hook for the payments, Granda said.

(1) The Clients' Security Fund was created by The Florida Bar to help compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Florida-licensed attorney.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

A Greenville personal injury attorney was disbarred last month for misappropriating money that belonged to his clients, according to an order from the N.C. State Bar.

The Bar, the agency which regulates the practice of law in North Carolina, disbarred R. Alfred Patrick following an investigation that began after several of his clients filed complaints.

In an order of discipline filed in Wake County, the Bar stated that Patrick diverted funds that should have been available for his clients and converted them to his own use; that he did so over the course of several years; that he failed to report his misappropriations and failed to respond to letters concerning them; and has shown himself to be untrustworthy.

The misappropriations occurred in a trust account that Patrick had at The East Carolina Bank for 23 of his clients. Between 2012 and July 2015, Patrick deposited funds in those clients' names in the trust account and over the course of several years removed the money for his own use, the order states.

For example, in 2015, as money was added to the trust account for some clients, every couple of weeks, there was less and less money in the account. One example was, according to the order, as of March 31, 2014, when there should have been $109,000 for 13 of his clients in the account, there was just $727.24.

As of Aug. 25, 2015, when there should have been $221,000 in the account, there was $16,952.23.

***

“Proper maintenance and management of entrusted funds is a cornerstone of the public's trust in the legal profession,” the order states. “Embezzlement is one of the most serious offenses an attorney can commit, betraying the client's trust in the attorney and the public's trust in the legal profession.”(1)

(1) The Client Security Fund was established by the North Carolina Supreme Court in 1984 to reimburse clients who have suffered financial loss as the result of dishonest conduct of lawyers engaged in the private practice of law in North Carolina. The loss must be one that was caused by the dishonest conduct of the lawyer acting either as an attorney or as a fiduciary in the matter in which the loss arose. The loss to be paid to any one client shall not exceed $100,000 as the result of the dishonest conduct of one lawyer.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

Improperly Dipping Into Trust Account Costs Another Attorney His Law License; Order Lists Four Clients Victimized Out Of $22K+

In Madison County, Tennessee, WBBJ-TV Channel 7 reports:

A local lawyer has been disbarred from practicing law by the Tennessee Supreme Court, according to a release from the Board of Professional Responsibility of the Supreme Court of Tennessee.

Marshall Scott Smith has been disbarred as of Nov. 18 and must make restitution to his former clients, according to the release.(1)(2) He also must pay the board’s costs and expenses as well as court costs.

Smith is not eligible for reinstatement to practice law because this is his second disbarment as he was previously disbarred and reinstated, according to the release.

Smith reportedly failed to deposit settlement funds into his trust account, misappropriated funds from clients, accepted fees for which little or no work was done, and failed to adequately communicate with his clients, among other misconduct.

Thursday, December 22, 2016

Section 8 Tenant Scores $13,500 Share (Out Of Total $75K Tab) In Settlement Of Gov't Whistleblower Lawsuit Filed Against Sneaky Landlord For Allegedly Clipping Her For Extra Secret Rent In Excess Of Amount Agreed To & Approved By Housing Agency

From the Office of the U.S. Attorney (Sacramento, California):

United States Attorney Phillip A. Talbert announced [] the resolution of federal False Claims Act allegations against Leatha Henderson for allegedly submitting false claims in connection with her participation as a landlord in the federal housing subsidy program. [...] This program is more commonly known as “Section 8.”

Regulations implementing the Section 8 program provide that participating low-income tenants pay 30 to 40 percent of their adjusted monthly income toward their rent and utilities, and the federally funded program pays the balance.

Henderson contracted with [the Sacramento Housing & Redevelopment Agency - "SHRA"] in order to participate in the Section 8 program and receive government payments for her Sacramento rental property between June 2007 and May 2013.

***

The HAP Contract restricted Henderson from charging rent to the tenant in excess of the Tenant Share as designated by SHRA based on the tenant’s income. Today’s settlement resolves allegations that Henderson falsely certified compliance with this rental payment restriction and fraudulently collected rental payments from both the United States and the tenant during the term of the tenancy.

“Charging in excess of the agreed tenant rate frustrates a primary goal of this important program: to provide affordable housing to low-income families,” said United States Attorney Talbert. “Landlords participating in the Section 8 program will be strictly held to their obligations under the governing regulations.”

“A landlord’s participation in the Section 8 program is voluntary,” said HUD Regional Administrator Jon Gresley. “When they choose to participate, they agree to fulfill certain responsibilities, including charging tenants no more than what they must pay in rent so that their homes remain affordable. HUD will continue upholding this standard, as it safeguards the program’s integrity and secures the public’s trust.”

The allegations resolved by the settlement were first raised in a lawsuit filed against Henderson(1) under the qui tam, or whistleblower, provisions of the False Claims Act by Sondra Madden, the tenant involved in the subject Section 8 tenancy.

The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower in this matter will receive approximately $13,500 of the recovery.

An Omaha landlord and his secretary bribed two employees of the city’s public housing agency in a scheme to keep payments flowing to their rental company, according to a federal indictment returned this week in U.S. District Court.

The landlord, Lafi Jafari, operates about 100 rental properties mostly in Omaha’s urban core. Some he owns personally, others through his business, MM&L International, where he has been assisted by MaryLou Gruttemeyer.

The Omaha Housing Authority employees were not identified in the indictment,(1) which alleges a total of about $2,100 in payments.

The alleged bribes were made most often in a dwindling denomination: $2 bills. They were offered to protect a lucrative stream of money flowing to Jafari and Gruttemeyer, whose low-income tenants are recipients of the housing authority’s Section 8 rent subsidies, according to federal prosecutors.

From 2012 through 2014, the period during which the U.S. Attorney’s Office in Omaha alleges that the enticements were paid, Jafari or his business received more than $600,000 from OHA via the U.S. Department of Housing and Urban Development.

Jafari, 73, and Gruttemeyer, 57, were indicted [] in U.S. District Court on conspiracy to commit bribery and six counts of paying a bribe to an agent of the Omaha Housing Authority.

Jafari was indicted alone on one count of making false statements to special agents of HUD’s Office of Inspector General. He told the agents “he had never provided anything of value to an employee of OHA,” according to the indictment []. He also told the agents he did not know the employee that they were asking about.

Jafari and Gruttemeyer are accused of providing or offering to provide bribes to the OHA employees to steer prospective tenants their way and to not refer complaints to HUD’s Office of Inspector General. One payment, the indictment says, was to secure an OHA employee’s false report that a Section 8 tenant was still living in a property so that Jafari would not have to reimburse OHA for overpayment.

No Criminal Violation By Ex-Housing Authority Executive Director For Scoring $375K Housing Loan From Agency While Acting In Official Capacity, But Finds Himself In Ethical Hot Water Anyway For Allegedly Creating Appearance Of Impropriety

In Lauderhill, Florida, the South Florida Sun Sentinel reports:

The International City/County Management Association has censured Assistant City Manager Kennie Hobbs for taking a housing loan from the Lauderhill Housing Authority while he was its executive director.

While the Broward State Attorney's Office found no criminal violation by Hobbs, the ICMA said that obtaining the 2014 loan was inappropriate and created the appearance he used his position for personal gain.

The ICMA's executive board also said Hobbs should not have had employees under him compiling his financial records and completing loan worksheets on his behalf.

The Broward Inspector General's Office in October concluded that Hobbs and city operations manager Julie Saunders had violated state ethics laws by accepting loans and forwarded its findings to the Florida Commission on Ethics.

Hobbs said he could not comment on the ICMA action because the ethics commission is still reviewing the allegations.

Hobbs received a $375,000 loan in 2014. The loans were available to any city employee, but the inspector general's investigation said his was the largest. It also said the loans for Hobbs and Saunders were the only ones to receive the program's lowest 6 percent interest rate.

The ICMA's mission is to create excellence in local governance and it provides training and professional development to more than 10,000 officials at the local level worldwide. Fort Lauderdale City Manager Lee Feldman currently serves as the organization's president.

Section 8 Tenant Appears To Have Gone On The Lam As Cops Seek To Put Pinch On Her Over Allegation She Lied On Housing Authority Forms To Fraudulently Obtain $72K In Rent Subsidies, Utility Allowances

In Honesdale, Pennsylvania, the Wayne Independent reports:

The authorities [] were searching for a 42-year-old woman accused of fraudulently obtaining $72,102 in rental assistance and utility allowance payments.

Wayne County detectives have an arrest warrant for Tawana Dees, 42, originally from Bushkill, who is sought on felony charges of theft by deception and making false statements.

Dees was a participant in the Choice Housing and Voucher Program administered by the Wayne County Housing Authority, which falls under the U.S. Department of Housing and Urban Development (HUD).

The Housing Choice Voucher Program [Section 8] assists eligible families with monthly rental expenses. The program participants are required to report all household members and all household income on annual certifications.

On July 25 the HUD Office of Inspector General filed a complaint with the Wayne County detectives alleging Dees failed to be truthful on her household composition and household income forms, according to District Attorney Janine Edwards.

Specifically, Dees failed to report that numerous other people were also living with her in a subsidized residence, the DA said.

Officials believe Dees is no longer in the area and may be living out-of-state. Anyone with information regarding her whereabouts is asked to contact Wayne County Detective Michael McMorrow at (570) 253-4912.

Nursing Home Operator Abruptly Pulls Plug On Facility, Forcing Over Two Dozen Stricken Residents To Scramble To Find New Accommodations

In Southport, U.K., Champion News reports:

A SOUTHPORT nursing home is to close down three days before Christmas – leaving 26 residents having to find new homes elsewhere.

The closure of Sunningdale Nursing Home came as a surprise to Sefton Council, who now say they are helping to find new homes for the stricken residents of the Albany Road site.

Previously the home had been rated as requiring improvement by the healthcare watchdog, the Care and Quality Commission, following a report which called into question the safety of residents as well as the effectiveness of leadership at Sunningdale.

And now, just three days before Christmas Day, residents have been told they need to urgently find new homes after owners, the Sunningdale Nursing Home Limited Group, pulled the plug on the home.

A spokesman for Sefton Council said: "Unfortunately we have been informed by the owners of Sunningdale Nursing Home, Southport that they are closing the home on December 22.

“We are working together with residents and their families, to identify alternative placements and to ensure transfers to new care homes are conducted in a timely, safe and dignified manner.

”The closure is beyond our control and we are aware that the timing is not ideal, especially given the current pressures being faced by both Adult Social Care and health services.”

Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York Dec. 1 concluded that the five creditors, including RAS Boriskin and Duane Morris, harassed the debtors for years by filing an illegal foreclosure action against the debtors’ property and sending dozens of collection letters after their debt had been discharged in bankruptcy.

The creditors and their attorneys “cavalierly” violated the bankruptcy court’s discharge injunction over a period of years and should be sanctioned as a result, the court said.

The case is noteworthy for the large punitive damages award, plus emotional distress damages, especially in a case where the debtors weren’t represented by counsel.

Cops Waste No Time, Respond In Force To Bust Squatter Who Broke In & Made Himself At Home In Vacant House Listed For Sale At $6.2 Million

In Bellevue, Washington, KIRO-TV Channel 7 reports:

The home may be one of the finest in the NW Bellevue waterfront neighborhood along Lake Washington Boulevard.

It is listed for sale at $6.2 million.

So attractive, police say, that a man broke into the vacant house and set up housekeeping. Bellevue police arrested the suspected squatter for trespassing.

Police say the son of the homeowners spotted a strange van inside the garage this morning. “When they knocked on the door, a gentleman opened the door saying that it was his house,” said a Bellevue police spokesman.

Police responded in force to cut off any escape routes. The suspect surrendered peacefully.

A neighbor knew something was amiss. “I notice they took the for sale sign down, that was kind of the first sign, cause it's still for sale,” said neighbor Tim Dillon.

“It's a little disconcerting, if you live in this area you don't expect this sort of thing to happen very frequently,” said neighbor Brad Kelley.

While in some instances a squatter can occupy a home for months, that didn’t happen here. “We were able to determine the rightful owners of the home very quickly. And at that point whoever's inside the home had no legal right to be there,” Officer Tyler said.

There are police surveillance cameras barely a block from the house, police will look at the footage to determine when the squatter’s van first arrived.

“It's nice to know police responded as quickly as they did and I'm sure they'll get it under control,” neighbor Kelley said.

Police say burglary may be added to likely trespassing charges if anything is missing from the home.

Squatter In Vacant Foreclosed Home Gets Busted By Cops, Not For Squatting, But For Theft Of Utilities After Using 56,000 Gallons Of Water Over 3-Month Period

A 46-year-old Fort Walton Beach woman was charged with theft of utilities after using 56,000 gallons of water from a foreclosed home where she was staying.

She had her mail forwarded to the address on June 8, according to her Okaloosa County Sheriff’s Office arrest report. She’d been staying from since May 6 and continued to use the water there up until Aug. 8, the report said.

Okaloosa Water and Sewer had locked the meter in June, but the lock was broken.

The suspect told deputies she knew the house was under foreclosure and that she did not have an active account with the water and sewer department. She also knew the lock had been broken.

Five people contacted the I-Team over the summer. They all hired Moss Construction and its owner, Joshua Zollweg, to build their homes in the last two years. Some of them say, though, at times, Zollweg forged their names on bank documents and didn’t pay contractors he hired.

The judge set a $660,000 surety bond. If bonded out, Zollweg cannot leave the country. He also cannot leave the state without the solicitor’s permission.

“I don’t have any sympathy for him,” said Betsy Hopkins, one of the forgery victims. “At least, we know that there’s some progress and justice finally happening. This is just the start of it,” said Richard Burke.

News 2 interviewed Burke and Hopkins during the original story in September.

Zollweg also recently filed for bankruptcy, and that may mean more court room visits for the families.

“This is just the beginning. I don’t know if we’ll ever get our money back, but at least I know he can’t continue doing this with now repercussions to him,” said Hopkins.

An attorney was present in support of Zollweg, however he denied to comment.

Burke and several other victims, who not included in Tuesday’s court appearance, are still facing bank liens and foreclosures from subcontractors Zollweg hired but never paid. However, those are matters to play out in civil court.

Burke began asking around. They found they weren’t the only homeowners dealing with the same issue.

“We began to correspond with each other and then we got together as a group and started comparing notes and realized, this was happening to, as it turned out between eight and 10 at least, that we know of right now,” said Burke.

In the end, Burke estimates Zollweg’s actions left them $600,000 in the hole. He said Zollweg filed for bankruptcy.

“The homeowner takes over 100% of the burden, we now have liens and foreclosures from subs and suppliers and it’s up to me to hire an attorney, go to court, do all the work to get all these things taken off this home even though I, in good faith, paid my builder who then, in turn, did not pay those subs and suppliers,” said Burke.

A New Mexico businessman claimed to help low-income Spanish-speaking families by finding them foreclosed homes to buy and, in some cases, financing the deals.

But the state’s attorney general [] said that Jesus Cano of Albuquerque deceived dozens of consumers by misrepresenting the conditions of the often poorly maintained homes he sold. Sometimes Mr. Cano sold houses he did not even own, the attorney general said, and at other times he tried to sell the same property to more than one family simultaneously.

Mr. Cano and his firm, JSS, were sued by the New Mexico attorney general in state court, alleging that his real estate and home financing activities revealed a pattern of “unfair and deceptive trade practices and unconscionable trade practices.”

Officials indicated other parties could be added later to the civil complaint, which seeks restitution and civil penalties.

This year, officials began investigating complaints about seller-financed home sales aimed at immigrant and Spanish-speaking communities. New Mexico is one of more than a dozen states where investment firms have bought decrepit homes in the aftermath of the foreclosure crisis and resold them to low-income families through either long-term installment deals called contracts for deed, or rent-to-own transactions.

“Families everywhere struggling to afford a home need to be aware that real estate contracts do not provide the same protections offered by a mortgage,” Hector H. Balderas, New Mexico’s attorney general, said in a statement.

“They should know that, among other things, a buyer who defaults on a seller-financed real estate contract could face imminent eviction and lose all of the payments made on the property,” he added.

***

He [] required customers to make a “good faith deposit,” from $1,500 to $46,000, for homes that New Mexico officials said were often “substandard” and had “defective plumbing” and “defective electrical wiring,” according to the lawsuit. Often, customers lost their deposits because Mr. Cano refused to refund the money, the authorities said.

“I buy homes and sell them,” Mr. Cano said. “The customers look at the homes, and they know exactly the conditions of the homes before they buy them.”

***

Officials [] said Mr. Cano was backed by a group of investors and corporations, who were unidentified.

He marketed his services by posting fliers on businesses primarily serving Spanish-speaking people and in churches mainly attended by Spanish-speaking congregants, according to officials in New Mexico. He also used his Hispanic heritage to ingratiate himself with potential customers, officials added.

“No one in this country deserves to have their dreams for a better life for their family exploited and destroyed,” Mr. Balderas said.

84-Year Old Retiree On Verge Of Getting The Boot From Home Of Four Decades After Ponzi Schemer Fraudulently Scores $400K+ Mortgage Secured By Victim's Home, Fleecing Him Of Life Savings

In Wilton Manors, Florida, The Miami Herald reports:

Kenneth Tuch lost his life savings to a Ponzi scheme. Now the 84-year-old retiree is losing the Wilton Manors home where he’s lived for 42 years.

Tuch says a bank foreclosed on him because of a mortgage taken out on his home by a convicted Ponzi schemer. The Broward County Sheriff is set to evict him on Jan. 6. Tuch doesn’t know what to do with his lifetime of possessions. Because of his ruined credit, he can’t find a new apartment.

“I’m going to be out on the street,” said Tuch, as he sifted through the reams of paper in his living room that he says prove he was the victim of fraud — despite a judge in foreclosure court siding with the bank.

***

In 2006, Washington Mutual cut a check for $447,840 with Tuch’s home as collateral — but it wasn’t made out to Tuch. A copy of the check shows it was paid to International Consultants & Investment Group Limited Corp., the Fort Lauderdale-based company [Ponzi schemer George] Elia used to conduct his Ponzi scheme.

A draft copy of the application for the loan is rife with mistakes. The form lists Tuch as an employee of International Consultants with 20 years of experience as a financial consultant. (He worked as an engineer at AT&T for 38 years.) It says he made $10,000 per month, when in fact his pension and Social Security amount to $1,600 per month. And it said his home was built in 1975, not 1954, as is stated in Broward County property records.

“I didn’t even know the loan had gone through,” said Tuch, who obtained the documents after being served with a foreclosure notice in 2014. It was the first time he realized the loan had gone through.

“By then WaMu was closed down,” he said. “And J.P. Morgan Chase bought WaMu. I knew that happened. So I went down to Chase. I played dumb. I said I lost all my papers. And they printed everything out for me. And I see that check. And the check is made out to Elia’s company. And I didn’t see a penny of it. I almost had a heart attack.”

All the while Elia, not Tuch, had been making monthly payments on the loan, bank records show. International Consultants paid $1,584.42 per month to the bank. Those payments stopped on Dec. 1, 2011, according to court records, the same month that panicked investors went to the FBI to report Elia, and about two months before he fled for Cyprus.

Monday, December 19, 2016

Upstate NY Man Gets 7 1/2 To 15 Years For Forging Judge's Signature To Illegally Claim Ownership Of Brooklyn Brownstone, Then Flipping It For $250K Profit

In Bedford-Stuyvesant, Brooklyn, the Bed-Stuy Patch reports:

An upstate resident was sentenced to seven-and-a-half to 15 years in state prison [] for claiming possession of a Bed-Stuy brownstone by forging a judge's signature, and then selling that brownstone illegally for almost $250,000, the Brooklyn District Attorney's office said.

In January 2015, Joseph McCray, a 54-year-old man from Niagara Falls, New York, filed a court order with the forged signature of Brooklyn Civil Supreme Court Justice Yvonne Lewis that said he owned the brownstone, Acting Brooklyn District Attorney Eric Gonzalez said.

McCray sold the house for $500,000 and cashed nearly $250,000 on it. The rest of the money had to be used to pay for outstanding liens, the Brooklyn DA said.

McCray spent over a decade trying to forge his ownership of 119 McDonough St. in Bed-Stuy, according to the Brooklyn DA. He was technically evicted from 119 McDonough St. in 2002 because he never paid rent, but he continued to live in the building for several years anyway, the Brooklyn DA said.

Between 2001 and 2007, McCray presented fraudulent information at Civil Court several times, pretending he was the landlord of the building and illegally collecting tenants' rents.

After Allegedly Defaulting On Contract For Deed, Upstate NY Man Gets Pinched On Felony Charges On Accusation Of Using Forged Deed To Swipe House From Out-Of-State Owner/Seller

In Syracuse, New York, The Post-Standard reports:

The minister of a Syracuse church was brought into court in handcuffs [] on felony charges relating to his alleged scheme to steal a city house.

The Rev. L. Micah Dexter, 46, was charged with criminal possession of a forged instrument and offering that instrument for filing. Bail was set at $20,000 cash or bond by County Court Judge Stephen Dougherty.

Dexter is accused of faking a deed that appeared to show that another man, James Greene, of South Carolina, had given him ownership of a South Side residence where Dexter had been behind on rent.

During an eviction proceeding, Dexter is accused of referencing the faked document before a City Court judge. Dexter was later evicted.

Greene filed a separate lawsuit in September accusing Dexter of illegally taking ownership of the house. The lawsuit says Dexter stole the entire signature page from another document -- signed by Greene -- and affixed the copy to the fake deed.

Greene had entered a "contract for deed" (rent to own) agreement with Dexter, but never transferred the deed after Dexter failed to make payments, the lawsuit says. Dexter is accused of copying Greene's signature from the "contract for deed."

In 2013, county records reflect Dexter took ownership of the house based on the allegedly forged deed. The house is valued at approximately $50,000.

Greene promised to seek criminal charges against Dexter. That led to [the current] court proceeding.

Dexter is minister of the Greater New Salem Missionary Baptist Church on South Avenue.

Suspected Serial South Jersey Rent Scammer Gets Pinched Again For Alleged Break-Ins To Hijack Possession Of Vacant Homes In Foreclosure & Rent Them Out For Cash To Unwitting Tenants; Charges Include Theft By Deception, Deceptive Business Practices

In Gloucester County, New Jersey, nj.com reports:

A grand jury has indicted a Camden man on charges that he rented a Woodbury home he did not own to an unwitting tenant.

This is one of several cases in which Raymond Erving, 41, is accused of breaking into homes in foreclosure and leasing them.

Erving allegedly entered a Watkins Avenue home illegally in April, posed as the owner and leased the property to a woman who did not know about the scam, authorities claim.

Erving drew up a lease for the property, police noted in their complaint, and the victim paid him rent to live in the home.

In May, Monroe Township Police arrested Erving, who also uses the name Levar Michael Taylor, on charges that he pulled similar scams at two homes in that community.

In those cases, utilities were illegally turned back on in the homes and winterization stickers placed on the closed-up properties were scraped off, police said. Erving then posed as an agent to lease those homes.

He allegedly received more than $12,000 from people leasing the homes for cash in Monroe Township, police said at the time.

Authorities became aware of the alleged crimes when neighbors called to report squatters in the foreclosed homes. When officers came to investigate, the residents showed them the bogus lease agreements.

Erving was charged with two counts of burglary, theft by deception, identity theft, forgery, criminal mischief and failure to register as a sex offender following that investigation.

Monroe Police indicated that they believed he had pulled similar scams in Mount Holly, Pennsauken, Willingboro and other South Jersey towns.

In the Woodbury case, a Gloucester County grand jury indicted Erving on charges of third-degree theft by deception and fourth-degree deceptive business practices.

Sunday, December 18, 2016

SoCal Landlord That Allegedly Refused To Allow Elderly Disabled Section 8 Resident To Have His Adult Daughter Reside In Apartment As A Live-In Caregiver Agrees To Pay Him $15K & Let Her Stay With Him In Resolution Of HUD Housing Discrimination Complaint

From the U.S. Department of Housing & Urban Development (Washington, D.C.):

The U.S. Department of Housing and Urban Development (HUD) [] announced an agreement with the owners and operators of Swansea Park Senior Apartments in Los Angeles to resolve allegations that they violated fair housing laws for refusing to allow a resident with disabilities to have a live-in aide and making discriminatory statements to him. Read the Voluntary Compliance Agreement (VCA).

The Fair Housing Act prohibits discrimination in the sale or rental of a dwelling because of disability, including the refusal to make reasonable accommodations in policies or practices when a person with a disability requires such an accommodation. This includes being allowed to have a live-in caregiver in a unit when it is necessary. In addition, Section 504 of the Rehabilitation Act of 1973 prohibits discrimination on the basis of disability by any program or activity receiving federal financial assistance.(1)

***

The agreement announced [] follows a complaint filed by a resident with disabilities who was denied a reasonable request to have his daughter reside with him as his live-in aide.

The manager allegedly advised the resident that if he was that sick he should not be living at the property and that if he needed assistance during the night, he should call 911. The manager also allegedly told the resident that she had blacklisted him and would check his apartment nightly to see if he had secretly let anyone in.

Because his reasonable accommodation request was denied, the man’s daughter had to shuttle him back and forth between her home and his home in order to care for him.

Under the terms of the agreement, the respondents will, among other things, pay the man $15,000, allow his daughter to be his live-in aide, undergo fair housing training, and adjust their reasonable accommodation policy.

(1) Apparently, the Swansea Park Senior Apartments in Los Angeles provides housing for the elderly, and has a project-based Section 8 rental subsidy contract with HUD, in which all 38 units at the property receive Section 8 assistance. This means that 100% of the renter households in the property pay no more than 30% of their adjusted income for rent.

SoCal Landlord Feels HUD Squeeze, Agrees To Cough Up $17,500 To Two Disabled Renters In Settlement Of Housing Discrimination Allegations That It Denied Their Request To Move Out Of Allegedly Mold-Infested Unit With Two Ruptured Water Pipes & Into Carpet-Free Apartment (Failure To Provide Dedicated Accessible Parking Spot Upon Request Didn't Help Landlord's Cause, Either!)

In Laguna Niguel, California, The Orange County Record reports:

Federal housing authorities have reached an agreement with Orange County landlords after two women complained of being discriminated against because of their disabilities.

Residents of the Alicia Park Apartments in Laguna Niguel filed a complaint on June 14 with the U.S. Department of Housing and Urban Development, the agency said [].

A woman with a mobility impairment and her daughter, who has a respiratory disability, asked building management if they could move to a unit without carpet. They stated their unit was infested with mold and had two ruptured pipes.

The women claimed the request was denied as was their request for an accessible parking space next to their unit, the statement read.

According to the agreement, the company that manages the apartments and its owners will pay the women $17,500, replace the carpet with flooring, get rid of the mold and dirt and add the parking space. They will also sign a one-year lease with the women.

Another 'Discriminating' Landlord Gets Reeled In By Fair Housing Testers; Agrees To Fork Over $70K To Prospective Tenant, Non-Profit Group To Resolve Allegations That It Had "No Kids" & "No Assistance Animals" Rental Policy

From the U.S. Department of Housing & Urban Development (Washington, D.C.):

The U.S. Department of Housing and Urban Development (HUD) announced [] an agreement resolving allegations that the owners and manager of an apartment complex in Littleton, Colorado, discriminated against families with children and people with disabilities.

The voluntary conciliation agreement settles a complaint brought by Denver Metro Fair Housing Center(1) against owners George and Helen Turk, along with their property management company, Katchen & Company, Inc., who were accused of having a 'no kids' policy and limiting housing options for persons with disabilities. Read the agreement.

***

The matter came to HUD’s attention when Denver Metro Fair Housing Center (DMFHC) and a Denver-area family with children filed complaints alleging that the owners and manager of Langford Apartments discriminated against families with children. The fair housing group complaint alleged that a man looking for an apartment for himself, his wife, and his toddler son responded to a Craigslist ad for a unit at the complex and was told by the on-site manager, who was employed by Katchen & Company, Inc., that Langford Apartments did not rent to families with children.

In subsequent tests conducted by the DMFHC, another on-site manager allegedly told a tester, "no kids," and "we don't accept children." The manager also allegedly told a tester posing as a deaf person that "we don’t allow service animals," and "if you’re deaf I don’t think this is the place for you."

Under the agreement, the Turks will pay DMFHC and the complaining family $70,000, provide Katchen employees with fair housing training, and establish a company-wide antidiscrimination policy. In addition, future ads for Langford Apartments units will include explicit language encouraging families with children and people with disabilities to apply.

(1) The Denver Metro Fair Housing Center is a non-profit group that works to eliminate housing discrimination and to promote housing choice for all people through education, advocacy and enforcement of fair housing law in the metropolitan Denver, Colorado area.

Under Threat Of Possible Fair Housing Act Problem, Zoning Board OKs Use Of Townhome In 36-Unit Complex As Group Home Housing Two Disabled Adults, Full Time Caregivers; Officials Resist Complaints From Angry Neighbors In Granting Reasonable Accommodation

In Forks Township, Pennsylvania, The Morning Call reports:

The two people with disabilities living in a Forks Township condominium with full-time staff are considered a family under zoning codes, township zoning hearing board members decided.

The Forks Township Zoning Hearing Board voted 2-1 at a hearing about a group home [...] that the people living in the home constitute a family. The decision about the home in the Chestnut Commons condominium complex came about after township officials told the organization that runs the home, Heart to Heart Care, LLC, to apply for a special exception.

Township officials initially asked the home operators to apply for a special exception . The township's zoning codes allow group homes for people with disabilities as long as they're approved by the zoning board and present site plans.

Zoning board member Katharine Fina said the home sounded like it met the definition of family — four or fewer unrelated individuals sharing in a common household — in part because residents and staffers shared a kitchen and common area.

But board member Robert Kimmel, who cast the dissenting vote, did not agree.

"I wasn't 100 percent certain it was considered a family and they lived together and partook together," he said. Kimmel said he considered that no one living there leads the home or pays their own bills.

Monday night's meeting was the third about the home. Previous meetings were contentious, with neighbors at the 36-unit development attending and complaining that the group home brought too much traffic and trash, and alleging staff members had arguments outside.

Heart to Heart Care attorney John Rule argued successfully that the home falls under the township's definition of family. Such a use is allowed without a special exception. He also said a failure to approve the home could lead to a violation of the federal law that protects people with disabilities from housing discrimination.

He also said if the board didn't consider the two people to fall under the family definition, they should be granted the special exception, and noted the Fair Housing Act requires municipalities to allow reasonable accommodations for people with disabilities.

"To deny the use would be to present an immediate barrier to these people, being a protected class, and respectfully it would constitute housing discrimination," he said.

The zoning board's attorney also noted the reasonable accommodation was allowed under the township's codes.

The Connecticut Fair Housing Center will send anonymous “testers” into Norwalk landlord and property management offices next year in search of potential discrimination toward renters.

[T]he Norwalk Fair Housing Advisory Commission authorized Norwalk Fair Housing Officer Margaret K. Suib to sign a contract with the Fair Housing Center to perform the testing. The cost of the program will be $10,000.

Suib, an attorney, said the Fair Housing Center will hire local people, prepare biographies for them, train them as “testers” and send them to real estate agents, landlords and property managers in Norwalk to complete 10 paired tests.

One potential paired test might involve two similarly aged white women with similar backgrounds. However, one woman relies upon a Section 8 voucher and the other doesn’t.

“Maybe one of you in our scenario would have Section 8 and the other would not. Otherwise, you’re similar. You’re white women, you’re about the same age, you’d be given a little biography basically about your family size, your income,” Suib said. “Everything would be the same except one with Section 8, one without, and you see how a Realtor’s office or a landlord or property manager treats you. Are you treated the same?”

***

Suib asked for $93,550 in the city’s current budget to launch a housing discrimination testing program, where individuals would be trained to approach landlords and real estate agents in search of housing opportunities in an effort to weed out discrimination. She was granted $10,000 in the budget. As such, the forthcoming testing program will be limited, she said.

CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)

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